Gulf shares slump after OPEC fails to agree oil production cut

DUBAI — Shares in the energy-dependent Arab Gulf countries plunged to multiyear lows on Sunday after recent failure by the cartel of the Organisation of Petroleum Exporting Countries (OPEC) and its allies to agree a proposed additional oil production cut.

On Friday, OPEC and its allies failed to clinch a deal on production cuts that would have offered support to energy markets, thus sending prices tumbling to four-month lows. 

The OPEC+ meeting was expected to agree to deeper cuts of 1.5 million barrels per day to counter markets fears, but Moscow refused to tighten supply.

Fears of a price war were stoked as Saudi Arabia — the world's top exporter — quickly responded by making significant cuts to its oil price.

All the seven bourses in the Gulf were in the red amid a panic sell-off over fears that energy prices, the mainstay of public revenues in the region, could collapse.

The Saudi stock market, the largest in the region, dived by 7.7 per cent minutes from the opening bell on Sunday, the first day of the trading week.

Shares in oil giant Saudi Aramco dropped below their IPO price of 32 riyals ($8.5) for the first time, losing some 7.6 per cent to 30.50 riyals.

The world's biggest company launched on the bourse in December in a record-breaking initial public offering, but since then its market value has slipped from the IPO value of $1.71 trillion to $1.63 trillion. 

The Dubai Financial Market shed 8.5 per cent at one point on Sunday, its worst decline in six years, before recovering slightly.

Its sister market in Abu Dhabi also lost 7 per cent, while the Qatar Stock Exchange dropped 3.5 per cent.

Market leader Emaar Properties, the largest real estate company in the Middle East, dropped 9.1 per cent to its lowest ever price of 2.99 dirhams (81 cents) a share.

Kuwait Boursa authorities stopped trading after the Premier Index slumped 10 per cent while the All-Shares index dived 8.4 per cent.

The tiny markets of Bahrain and Oman dropped by 3 per cent and 1.1 per cent, respectively.